U.S. stocks fluctuate, bonds little changed amid earnings, data

U.S. stocks fluctuated between gains and losses and Treasuries were little changed as investors analyzed earnings and economic data for clues on the Federal Reserve’s stimulus plans. The yen strengthened.

The Standard & Poor’s 500 Index rose 0.1% at 1:42 p.m. in New York, erasing an earlier drop of as much as 0.4%. The yield on 10-year Treasury notes was at 2.60% after weaker-than-average demand from the latest auction. The Stoxx Europe 600 Index slumped 0.5% amid disappointing earnings after reaching an almost eight-week high yesterday. The yen climbed versus all except one of its 16 most-traded peers.

Facebook Inc. posted revenue and profit that beat analysts’ estimates while BASF SE, the world’s biggest chemical maker, reported earnings that missed forecasts. Newmont Mining Corp. and Amazon.com Inc. are among companies set to report earnings today. U.S. durable goods orders increased more than forecast in in June, according to Commerce Department data, while jobless claims rose in the latest week.

After record highs, “we seem more inclined to sink back into what may be a trading range,” said Bruce McCain, who helps oversee more than $20 billion as chief investment strategist at the private-banking unit of KeyCorp in Cleveland. “We are kind of stuck in that middle ground where data is not bad enough to be encouraging about more quantitative easing, but it’s not good enough to convince people that there is enough there fundamentally to justify sharply higher prices.”

The S&P 500 declined the most in a month yesterday, after climbing to within 3 points of 1,700 for a third straight day, as housing and manufacturing data fueled speculation the Fed may reduce its asset-buying this year and investors weighed earnings reports from Apple Inc. to Caterpillar Inc.

Fed Stimulus

Support from central banks and better-than-estimated corporate earnings have driven the S&P 500 up as much as 151% from its March 2009 low to record highs. The Fed has said economic data will determine the timing and pace of any reduction in its $85 billion in monthly bond-buying. The Fed will start trimming purchases in September, according to a Bloomberg survey of economists.

Bookings for goods meant to last at least three years increased 4.2% after a revised 5.2% gain in May that was bigger than initially reported, the Commerce Department said today. The median forecast of 79 economists surveyed by Bloomberg called for a 1.4% advance. A separate report showed initial jobless claims rose in the week ended July 20 while continuing claims declined.

Facebook surged 27% today as the operator of the world’s most popular social-networking service reported sales and profit that exceeded estimates. Visa Inc. advanced 4.8% as profit topped forecasts. PulteGroup Inc. fell 11% after costs to settle a contractual dispute led to a drop in earnings. D.R. Horton Inc. slid 8.9% as order growth missed analysts’ estimates.